The Covid-19 pandemic has had a more negative impact on global economic activities in the first half of 2020 than anticipated, and the recovery is projected to be more gradual than previously forecast.
Covid-19 lockdowns have led to an almost complete standstill in airline travel worldwide. Many airlines have grounded most of their flights, globally.
And financially, 2020 will go down as the “worst” year in the history of commercial aviation as it faces the gravest peacetime crisis following the pandemic outbreak.
With countries closing their borders, cancelling events, restricting gatherings, and imposing lockdowns, millions of people around the world have to be self-quarantined at home on an unprecedented scale.
The result — the travel industry, aviation in particular, as well as other key sectors, began to nosedive.
Many countries depend on international tourism to balance their budget, and have already been hit because of the pandemic.
The crisis will deepen further with the European Union (EU) extending a ban on travellers from the United States and some other countries (beyond July 1), citing epidemiological factors for the decision.
This will directly hit airlines as a large chunk of holidaymakers opt to fly on the transatlantic routes.
According to the United Nations World Tourism Organisation (UNWTO), the decline in international tourism for the rest of 2020 could translate to $910bn — $1.2tn in lost revenue for the industry.
Prospects for the year have been downgraded several times since the outbreak and uncertainty continues to dominate.
Current scenarios point to possible declines in arrivals of 58% to 78% for 2020, UNWTO noted. These, however, depend on the speed of containment and the duration of travel restrictions and shutdown of borders.
This is by far the worst crisis that international tourism has faced since records began (in 1950). The impact will be felt to varying degrees in the different global regions and at overlapping times, with Asia and the Pacific expected to rebound first.
In many places across the globe — North America and Europe in particular — it is summer season now, and therefore, the time for leisure travel.
The coronavirus pandemic all but stopped leisure travel in the world’s largest leisure travel market — the United States for much of the spring, and with the onset of summer, many Americans are still unsure what a vacation is supposed to look like in 2020.
According to Automobile Association of America (AAA), Americans will take over 700mn trips in July, August and September, which is 120mn fewer trips than in 2019.
“In an alternate universe where the pandemic never hit, AAA would be projecting 857mn trips in the third quarter, a 3.6% increase over last year. By this analysis, the pandemic wiped out nearly 150mn person-trips this summer,” according to global broadcaster CNN.
Unlike many travel companies, some airlines have continued to operate throughout the pandemic, although at drastically reduced numbers.
“Practices they have adopted over the past few months are likely to shape the future of flying, though some are certainly short-term fixes,” notes The Washington Post. Blocking off some seats on planes or limiting the number of tickets sold, for example, is unlikely to be the status quo as more people start to fly. Such measures aren’t even guaranteed today across the board.
“You’re going to definitely have to sit next to a stranger again, I’m afraid, on a plane,” JetBlue chief executive Robin Hayes said during a Washington Post live discussion recently.
“Because of the economics of our industry, most airlines have a break-even load factor of 75 to 80%, so clearly capping flights at 55 to 60%, which is what we are doing right now through July 6, is not sustainable.”
Airlines are already requiring passengers and employees to wear masks, cutting food and beverage service during flights, and increasing how often they clean.
Following the outbreak of the pandemic, many airlines based in Europe and Asia have made it compulsory for passengers and customer-facing employees to wear facial coverings over their nose and mouth. They have made known their intention to ban passengers who refuse to wear face masks on their flights, punctuating stricter approach to safety amid mounting concerns about the novel coronavirus infections.
Passengers who do not wear face mask could see their flying privileges revoked in future, as some global airlines have begun vigorously enforcing policies, putting rigour around rules requiring them to wear facial coverings over their nose and mouth.
The latest to enforce face covering rules are the major carriers based in the US, who are part of the Airlines for America (A4A), the industry trade organisation representing the leading airlines in the world’s largest aviation market.
Obviously, the world is facing an unprecedented health and economic crisis. Tourism and travel industry has been hit very hard, with millions of jobs at risk in one of the most labour-intensive sectors of the economy.
Sadly, the wound inflicted by the pandemic on the wider travel industry is deep, and it hasn’t stopped bleeding yet!
* Pratap John is Business Editor at Gulf Times. Twitter handle: @PratapJohn.
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